US cord-cutting confirmed

By Chris Forrester

September 28, 2012

The major pay-TV cable TV providers in the US lost 600,000 subscribers in Q2. This, says IHS Screen Digest in its latest report, is an “improvement” on the 625,000 lost in the same period last year, but with DirecTV losing subs (its first-ever negative growth of 52,000), and IPTV growth at FiOS and AT&T also slowing, there can now be little doubt that so-called cord-cutting is a reality.

IHS Screen Digests make the fair point that the term ‘cord cutting’, and blaming Over-The-Top suppliers as the cause, is “largely overblown”. That there is cord-cutting is just as likely to be driven by the poor US economy as distinct to a wholesale switch to OTT services from the likes of Netflix.

However, there’s also little doubt that Netflix continues its steady growth, although some of its many rivals are falling by the wayside.

Nevertheless, IHS Screen Digest suggests that US pay-TV growth for 2012 will be “generally flat” for the next few years “through to 2016”. Indeed, the next few months, through to Q1 of next year will be “tough for cable operators, and good for IPTV operators”. But again, the report blames the fact that “many US households have negative net savings” and while in the past cable subscriptions were largely immune from these financial problems but the proliferation of OTT offerings is perhaps acting as a “brake” on pay-TV growth.